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- Release Date: 21/01/14 14:00
- Summary: GENERAL: FSF: Fonterra issues Renminbi Bond to support China growth
- Price Sensitive: No
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FSF
21/01/2014 12:00
GENERAL
REL: 1200 HRS Fonterra Shareholders' Fund (NS)
GENERAL: FSF: Fonterra issues Renminbi Bond to support China growth
Fonterra Co-operative Group Limited announced today it has raised 1.25
billion Chinese renminbi (approximately NZD250 million) through a 5 year "dim
sum" bond issue (Chinese renminbi raised offshore) as part of its ongoing
commitment to developing its China business.
Fonterra Chief Financial Officer, Lukas Paravicini, said the funds raised
from the dim sum bond issue will be used to further strengthen and support
the growth of Fonterra's businesses in China.
"Along with refinancing some of our existing China operations, we will also
be using funds to support further growth in this market. This will include
the further expansion of our consumer, foodservice and farming operations,"
he said.
Fonterra President Greater China & India, Kelvin Wickham, said the
co-operative has had a strong focus on driving growth in both volume and
value as it develops its integrated business model in China.
"Last year we successfully launched our premium milk brand, Anchor, and also
launched a new paediatric formula product specially tailored for the China
market under the Anmum brand.
"At the same time China is expected to see a continued gap between the demand
and supply of raw milk so our farming business will continue to build
supplies of quality raw milk to meet local consumer demand.
"Our well-established foodservices and ingredients businesses, which import
quality products from New Zealand, are also expecting to see continued growth
in the coming years.
"The renminbi bond issue will support the growth of our whole business, and
in particular our consumer brands business which are a key focus for growth
given it is at an earlier stage of development," Mr Wickham said.
Mr Paravicini added that the decision to issue the dim sum bonds is part of
Fonterra Treasury's diversified funding strategy. This comprises a
combination of bank facilities and debt capital market bonds, which currently
includes bonds denominated in New Zealand Dollars, Australian Dollars, US
Dollars, Renminbi and Sterling.
"The dim sum bond market has continued to develop strongly over recent years
and provides an attractive opprotunity for us to raise long term renminbi
funding that matches our businesses in China. As this funding market and our
business in China develop further, it makes sense to seek a greater alignment
between our treasury borrowing and our business activities," Mr Paravicini
said.
This is the second time Fonterra has issued bonds denominated in Chinese
renminbi. The first time was in 2011 when it became the first Australasian
company to tap the dim sum market.
End CA:00246254 For:FSF Type:GENERAL Time:2014-01-21 12:00:11
